Indian farmer should be made free from state interventions for transforming the agriculture sector, said Bibek Debroy, Chairman of the Economic Advisory Council to Prime Minister on Friday.
In his inaugural address at the businessline Agri-Business and Commodities Summit ‘Turbocharging the Agri-Biz and Commodities sector’, Debroy, while demystifying the definition of farmers protection, said “ The farmer should be protected from unwarranted state interventions. If you free the farmer from that intervention, Indian agriculture can be transformed.”
The summit is powered by Bayer with NCDEX as exchange partner and Tata Chemicals, Rallis India Ltd, APEDA, Olam Agri, NSE and SSVM Insitutions and Department of Agriculture, Government of Karnataka as associate partners. State Bank of India is the banking partner of the event, Casagrand the Realty Partner and Tamil Nadu Agricultural University the knowledge partner.
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Debroy said MSP is supposed to be a minimum support price, and it is not supposed to be a procurement price. “Today the MSP is tantamount to a procurement price. So we should ask ourselves the question do we want a procurement policy at all,” he said. Indian farmers are much more entrepreneurial than many corporate houses because the farmer takes risks all the time, he added.
When policies are framed in Parliament and in state legislatures, they may pretend to represent the views and interests of farmers. He wondered if they truly do that or they represent the views of large farmers.
What needs to be done to enhance the productivity, the technology, the marketing channels, the investments, and the links in terms of distribution. “In each of these you will tend to find controls,” he said, adding those controls have not gone away, and quoted the example of APMC Acts.
“Think of things like cold storages, and think of the orders that still exist at the state government level for cold storages. We know the technology exists to develop food processing. We know the value addition that can be brought about. But fundamentally the bottom line is that there is a political economy of resistance. It comes about because of the mindset that the Indian farmer does not know what is good for it,” Debroy said.
Though the definition of a farmer will vary slightly from state to state, it is contingent on ownership of agricultural land, ancestral or others.
Stating that the country now has the technology to match the revenue records with satellite imagery, use handheld devices to have modern land records, but the fact of the matter is there are states in India where the last cadastral survey was done in the 1910s and 1920s, he pointed out.
Land is a bundle of rights, and it can unbundled in different ways. “But until we have modern land systems, and modern land records, how can we possibly reform,” he said.
Referring to the 1991 reforms in the country, he said there were reforms that pertained to the external sector and industrial sector.
Asking if the reforms in agriculture had been introduced and if the agriculture being subjected to within de-licencing, he said the answer is no. By and large, the output side, the marketing side, the distribution side, and the input side are controlled, he said. The reform agenda for agriculture has not only been pending since 1991, it it is pending even today as we speak, Debroy said.
As consumers Indians have been benefited from the liberalisation. “If we have benefited from the liberalization, why should we as consumers object to the liberalization of agriculture,” he said.